Organic packaged salad, fresh fruit, and vegetables
Headquartered in San Juan Batista, California, Earthbound Farm is an organic food company offering packaged salad, fresh fruit and vegetables, as well as dried and frozen fruits and veggies. Drew and Myra Goodman founded the company in 1984 with the belief that growing wholesome, organic food is the better and more delicious choice. In the mid-80’s, Earthbound became the first company to successfully launch prewashed, packaged salad for retail sale. Thanks to continued innovation, Earthbound Farm became one of the largest growers of organic produce in the country. Over the years, Earthbound has led the industry in social responsibility and environmentally sustainable practices with the mission of making organic foods available to all. Earthbound sells its products to retail grocers, natural food retailers, club stores, mass merchants, and food service distributors across the nation.
The Value Creation Opportunity
The Kainos team developed an investment thesis targeting the perimeter of the store, where grocery retailers were increasingly focused on providing on-trend, convenient products and a differentiated shopping experience to their customers. In developing this thesis, the Kainos team formed a relationship with the Goodmans and the Earthbound management team as part of a broader investigation of the value-added produce sector. Earthbound selected the Kainos team as their partner due to the strong relationship formed over the years, and Kainos’ knowledge of the category and strong retailer relationships. The Kainos and Earthbound teams shared a vision to drive the evolution of the business from a “leading organic produce business” to a “leading organic food platform,” culminating in our investment in 2009.
Change Capital at Work
At the onset of the partnership, the Kainos team helped Earthbound recruit strong senior talent, including a new Chief Customer Officer, Chief Marketing Officer, Chief Human Resource Officer, as well as supply chain, product development, and product sourcing executives. Kainos also made strategic investments in Earthbound’s operations to vertically integrate various elements of its supply chain, from lettuce growing through making our own packaging. We also invested substantial capital in the production facilities, adding additional capacity and automation, and new equipment sets for new product lines.
During our partnership with Earthbound, the Company experienced substantial growth in organic packaged salad driven by new product initiatives. Additionally, the Kainos team worked alongside the R&D team and developed and launched new value-added food items, such as frozen fruit products, snack mixes, and purees, many of which were facilitated by the Kainos-led expansion of the global fruit sourcing program. Earthbound successfully grew beyond the produce aisle of the store, launching a full line of 14 organic frozen fruits and vegetables.
Earthbound and Kainos fulfilled our shared vision of creating a scale organic food company that stayed true to its heritage, continued to innovate, and fulfilled the mission of the founders of bringing the benefits of organic food to more people. The successful transition of Earthbound from a regional organic produce company to the largest non-dairy organic brand in the Country attracted strong strategic interest. Ultimately, Earthbound was acquired in 2014 by WhiteWave Foods, a leading consumer packaged food and beverage company focused on plant based nutrition.Back